Nigeria’s Economy stabilizes, witnesses 8 successive quarters of growth

By Hajia Sani, Abuja.

Mrs. Zainab Shamsuna Ahmed, Nigeria's Minister of Finance, Budget Planning.

The macroeconomic environment of the country has shown significant growth and stability and witnessed eight successive quarters of economic growth since after the country emerged from recession.

This is according to a report presented to the National Economic Council (NEC), chaired by Nigeria’s Vice-President, Prof. Yemi Osinbajo, SAN.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, made the presentation, while affirming the Economic Recovery and Growth Plan (ERGP), as the basis for the Medium Term fiscal strategy.

She also highlighted that Macro-economic stability has been achieved with growth in end Q3, 2019 at 3.01 percent; continued increase in Real GDP from 1.89 percent in Q2, 2018 to 2.01 percent in 2019; there has been significant growth in non-oil sector.

Other significant economic growth records include the fact that inflation has continually declined since 2017 from 18.72% to 11.08% in July 2019; contribution of the non-oil sector to GDP has also increased 90.4% in Q1 2018 to 90.9% in Q1 2019.

Highlights of the National Economic Council (NEC) Deliberations:

Updates on NEC Committee on Export Promotion:

The Governor of Jigawa state, Alhaji Mohammed Badaru Abubakar, presented an update on the Committee’s activities.

The report is sequel to the Zero Oil Plan, envisioned in the Economic Recovery and Growth Plan (ERGP) which is developed by the Nigeria Export Promotion Council (NEPC).

The implementation of the plan is expected to yield results in these key areas:

  1. Add an extra UDS150 billion (minimum) to Nigeria’s foreign reserves cumulatively from non-oil exports over the next 10 years;

2. Create 500, 000 jobs annually, lift 20 million Nigerians out of poverty, contributing towards SDG- “No Poverty’’.

According to him, the committee has recorded the following achievements:

  • Designed an implementation Plan for Project implementation
  • Harmonized Export Development Plan submitted by states
  • Identified Projects based on the Implementation Plan and States Submissions.
  • Set up Templates and Schematics for Domestic Export Warehouse and Anchor Programme for Exporters.
  • Provided processing equipment and conducted Capacity Building Programme on Strategic Products in the Zero Oil Plan in Kaduna, Benue, Ondo, Edo and Imo states. The products are Palm oil, Soya Beans and Ginger.
  • Identified Companies for the Domestic Export Warehouse and Aggregation Centre for exportable products.

He further revealed that the other achievements of the Zero Oil Plan to date includes:

Non-oil exports (excluding natural gas) which have risen from US $1.17 billion in 2016 to US$3.16 billion in 2018; meaning that Strategic sectors identified in the Zero Oil Plan have seen growth.

For instance, cocoa exports have risen by $79.4 million since 2017, while sesame exports have also increased by $153 million since 2016 – an increase of more than 100%.

The plan has identified the creation of five million jobs to date directly supported by non-oil exports, with efforts underway to increase this by 500,000 new jobs annually in line with SDG 8 – “Decent Work and Economic Growth”.

A state Export Development Fund has also been created through N50bn debenture to be disbursed by NEXIM, in which the Central Bank of Nigeria (CBN) has invested. The Fund offers long –term loan at single-digit interest rate to qualifying export-oriented projects under the State Export Development Programme and the Anchor exporter scheme.

After the presentation and discussion, the Council agreed to include the Minister of Foreign Affairs as a member of the Committee and also follow-up on the obligation of the Nigeria Maritime Administration and Agency NIMASA regarding the financing of the Nigerian Export Promotion Council (NEPC).

Going further, the National Economic Council (NEC) received a presentation titled, “FINANCING THE NEXT LEVEL” ALTERNATIVE AND INNOVATIVE LONG-TERM FINANCING FOR NIGERIA CRITICAL NATIONAL INFRASTRUCTURE” from the Chief Executive Officer of the Nigerian Stock Exchange- Mr. Oscar Onyema.

The CEO, Nigerian Stock Exchange noted that the Nigerian Stock Exchange has actively supported Nigeria’s growth since 1960.

His words: “The Capital market is highly connected and therefore crucial to the country’s economic development.

“The NSE is today one of Africa’s foremost Exchanges servicing the No 1, Economy in Africa with a Market Capitalization of N25.7trillion ($70.7bn).

“Over the last 5 years, N10.3trn in long term capital has been raised by federal and state governments in the form of Government Bonds.

“The Capital market offers innovative financing solutions for Nigeria’s $100bn infrastructural challenge.

“However, solving Nigeria’s infrastructure challenges remains the panacea for actualizing the country’s full economic potential.

“There are untapped state investment opportunities in $1 trillion global privatization market and N9 trillion local pension sector.

“Unlocking the value will require Public-Private Partnerships (PPPs) and Special Purpose Vehicles (SPVs); Infrastructure, Sukuk and Green Bonds; Real Estate Investment Trust (REITs); Refinancing bank debt through capital market instruments; and Partnerships with Development Finance Institutions (DFIs) – onshore/Local currency bonds.”

The Council welcomed the presentation and noted the proposal.

Meanwhile, the Honourable Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed, reported to the Council that balances in the underlisted accounts as at 20th August 2019 was $95,329,245.24.

She gave the breakdown as follows:

“On the Stabilization Fund Account, the balance as at 20th August 2019 is N21, 729,976,810.66.

“On the Natural Resources Development Fund, the balance as at 20th August 2019 is N95,896,886,829.69”.

Update on the National Budget Support Loan Facility.

The Honourable Minister of Finance briefed NEC on how the Federal Government has made a total of over N614 billion available to 35 states, being N175 billion each.

The Council agreed to constitute a team from the Nigerian Governors’ Forum to meet with the CBN and Ministry of Finance to finalize modalities for commencement of payment.

Presentation on the medium-term expenditure framework and medium term strategy paper

The Honourable Minister of Finance, Budget and National Planning informed NEC that the purpose of the presentation was to get inputs and recommendation from the Council for further presentation to the Federal Executive Council (FEC) for approval and implementation.

She said, “Nigeria macroeconomic environment has stabilized in recovering gradually.

“There has been eight (8) successive months of economic growth since emerging from recession.

“The Economic Recovery and Growth Plan (ERGP), remains the basis for the Medium Term fiscal strategy.”

The Honourable Minister also highlighted successes recorded:

“Macro-economic stability has been achieved with growth in end Q3 2019 at 3.01%

“There’s been a continued increase in Real GDP from 1.89% in Q2018 to 2.01% in 2019.

“There has also been significant growth in non-oil sector.

“Contribution of the non-oil sector to GDP has increased by 90.4% in Q1 2018 to 90.9% in Q1 2019.

“The Unemployment rate was at 20.1% at Q3 2018.

“There’s need for more diversification to boost inclusive growth and Mr. President is strongly committed to employment generation in this second term.”

She also noted that:

“Considerable success has been recorded in containing insurgency in some parts of the North East, with economic activities recovering, although recurring conflicts between farmers and herdsmen, as well as incidences of flooding, have affected agricultural products.

“Breaches in NNPC pipelines are still regular, partly accounting for low oil production volume in the first half of the year.

“Inflation has continually declined since 2017 from 18.72% to 11.08% in July 2019.

“The draft 2020 – 2022 Medium Term Fiscal framework indicates that Nigeria faces significant medium-term fiscal challenges, especially with respect to revenue generation. Therefore, there is need to improve revenue collections and expenditure management.

“There is also the need to take a bold decision and urgent action to achieve fiscal sustainability and macro-fiscal objectives.”

At the end of the presentation, the Council welcomed the MTEF and offered suggestions.

New Ministers in their midst were also welcomed, namely Finance, Budget and National Planning; State, Budget and National Planning; Health; Agriculture and State: Petroleum.


Amaka E. Nliam